Money Market with Trail?

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Apr 6, 2008 2:49 pm

My BD just dramatically lowered the Bank Deposit Sweep rates that my clients receive on their cash.  Very few of my clients have or use the checkbook feature of this.  Most of my clients do not keep a lot of spare cash in this, but some do and it frusterates me that my BD:

 
a)  lowers them and tiers clients and makes a profit of this
b)  does not give me any payout on this
 
For my fee-based accounts it is not an issue as I can just by something like Vanguard Money Market and the client gets a good rate even after my advisory fee (I can also bill less on mmkt assets).
 
However, for my commission based accounts that carry significant mmkt balance I would like to find a mmkt mutual fund that I can purchase for client that at least pays me something like a 25 or 50bp trail.  Obviously no front or back end load.  Maybe a load-waived a-share? 
 
Any ideas?
Apr 6, 2008 7:41 pm

Try the Putnam M-share money market.

Apr 7, 2008 11:42 am

I use AmFunds MMKT.  The trail is only 8 bps, but it's something and I'm confortable with AmFunds philosophy and conservative nature...I'd say they'd be one of the last to ever break the buck or even need to throw in to avoid breaking the buck.

 
...and I'm not happy with what's happened to the ICA either.  I only use it for my largest accounts and those who insist on FDIC insurance.  At least there is a mechanism to go direct to the fund company and link it to the LPL account.
Apr 7, 2008 12:07 pm

Putnam T share money market pays 25bps, the M share pays 10 or 15 bps.  There isn't a spot on the form to mark T share, you just have to write in that you want a T share, and I usually include a 1 sentence memo with the application.

 
It is the same as the A share, just the yield is 25bps less for the client.  Even if it is only enough to buy lunch at McDonalds, I feel better getting paid something for the service and liability we assume.
Apr 7, 2008 2:52 pm

I've used the ING Classic Money Market.  I think it pays 10 bps.

Apr 7, 2008 9:08 pm

Are any of these an option for us Joneses?

Apr 7, 2008 9:33 pm

I thought these things didn't happen in the worderful world of Indy! LOL

Apr 7, 2008 10:19 pm

Sure they do...and we bitch about it.  The key is that I can work around the issue by going direct to the provider.  Can you?  I'm not saying one way or the other about your B/D, but I've seen complaints here about various B/D cash programs being forced on reps, apparently without any alternatives.

Apr 7, 2008 10:32 pm

Thanks for the posts.  Whether you are Indy or not, whatever firm you use to custody your assets will have their own sweep account.  But at least I have options.  I can buy the client a no-load money market (as long as they don't need "checking"), but I'd just like to get paid something.  I also want to do it in the brokerage account and not direct through the fund company.   The Putnam T share sounds good.   I've never been a big fan of their funds but Putnam can't screw up a money market fund... can they? 

Apr 8, 2008 12:16 am

I4L, I don't know about the other MMKT options, but AmFunds WILL give you checking (minimum $250/check) and you can link the LPL account for debits and credits to the MMKT (see the resource center for ACH instructions).  It is a simple matter to set the client up to sweep back and forth between LPL and your direct MMKT and give check access to your direct MMKT.  For presentation purposes, you can also link it to the statement.




 
As an aside, you can deposit pretty much anything into an LPL account...social security checks, tax refunds, paychecks...if it can be electronically deposited, it can be put in an LPL account.  Not unique to LPL, but I wasn't sure if all you LPL indies knew that...at one point, I didn't.
Apr 8, 2008 4:39 pm
Indy4Life:

Thanks for the posts.  Whether you are Indy or not, whatever firm you use to custody your assets will have their own sweep account.  But at least I have options.  I can buy the client a no-load money market (as long as they don't need "checking"), but I'd just like to get paid something.  I also want to do it in the brokerage account and not direct through the fund company.   The Putnam T share sounds good.   I've never been a big fan of their funds but Putnam can't screw up a money market fund... can they? 

 
I've never done it in a brokerage account, so I can't confirm that.  I know that if you do it direct with them you get a check book, I have probably $3-400,000 in client money parked there, most of them have checkbooks.
Apr 9, 2008 9:37 pm
Indyone:

Sure they do...and we bitch about it.  The key is that I can work around the issue by going direct to the provider.  Can you?  I'm not saying one way or the other about your B/D, but I've seen complaints here about various B/D cash programs being forced on reps, apparently without any alternatives.


We have bank depsoit and MM but can also use outside mm if we want...open architecture :)